About 30% of my clear coat has chipped off. That makes the surface significantly uneven. How much do I need to sand? I think I have two options. 1) Rough up everything. 2)sand past the clear coat everywhere to make it an even surface. My thinking is if I did option 1, I would have an uneven first coat but then I could smooth it out in subsequent coats/sanding. I plan on using interlux.

 

Well, if you want to spend hours and hours and hours sanding and smoothing your current paint, go ahead. Then remind yourself that you're going to be painting with a roller

That helped me maintain my sanity by not going crazy with the prep sanding.

 

And remember also that in your effort to save money, your results will reflect that.

The proper way to repair it would be to sand/feather out the damaged coating with 400-600 grit with a block (to keep it even), and 1000 grit over the rest of the connected panel with good paint still on it. Recoat the color over the damaged areas, blending onto good condition painted areas. Then using a quality clear coat over the entire panel.

If the clear is delaminating (chipping or flaking off rather than just "burning off") then there is an adhesion problem between the clear and base. The only way to guarantee it from future delamination is to break down the damaged clear completely and remove it from the base, which also means the color will have to be re-coated.
You get what you pay for. $30 paint, get's you about a $15 looking paint repair.

 

spray with rockguard/bedliner. never worry about scratches again..

 

.....and never be able to take it back if you change your mind. Lol